Guiding consumers since 2009

Inflation drops to 13%

By Staff Writer

Inflation drops to 13%

Compare banks, get quotes and save with Justmoney

CPIX Inflation has dropped to 13% according to figures released yesterday by Statistics South Africa.

 

Most of the news organisations are covering this story today. Here is what they have to say.

The Times lead with the headline "Inflation loses its bite". They pointed out that the main drivers of the reduction in inflation were the slower rise in food prices and cheaper fuel prices with their related effect on transport costs.

Click here to get car finance.

Click here to get car insurance quotes.

In the high inflation environment that has been in existence this year, both of these factors have been running consistently above headline inflation figures.

The danger however was pointed out to be uncertainty surrounding future electricity prices. Business Day reported that Eskom faces an interest bill on the borrowing that it has taken to finance its expansion. This interest bill may run up to R120 billion! The effect of this is that if it is passed onto consumers we could see extra electricity bills next year.

Click here to get a savings account.

Business Day also reported on the inflation story commenting that it boosted local markets and helped to raise hopes of an interest rate cut next near.

They also pointed to lower than expected wage hike for domestic workers as being a driver of slower rising consumer prices.

While the signs seem favourable for a rate cut early next year, it was also pointed out that there was a considerable degree of forecast risk associated with CPIX at the moment due to international currency market volatility. Some of their surveyed economists were even plumping for a rate rise with no cuts in sight until the middle of next year.

Business Report went with the view that this was the start of the downward trend, that inflation has now peaked and that it should begin to get better now.

They cautioned that although inflation might have peaked the December meeting of the Monetary Policy Committee would be too soon to start cutting rates.

Trevor Manuel said in his mid term budget that inflation was expected to return to the target range of 3-6% by the third quarter of next year. This was seen as confirmation that peak inflation has been surpassed.

The Dispatch reported that there was a decrease in consumer borrowing, with private sector credit extension falling to less than had been predicted.

Click here to get personal loans.

Click here to get a credit card.

Finally iAfrica interviewed four economists on the inflation figures. All of them were of the opinion that this was good news, although notes of caution were expressed especially regarding the value of the Rand and the fact that its weakening will only show up in the next set of inflation figures.

The whole CPIX report can be read here.

Click here to view our budget planner.

Recent Articles

Featured Times are tough, but keep your debt under control

While the whole world is going through a rough patch, you may also be feeling the pinch. With the country in crisis, it may be difficult to keep up with your debt instalments. However, abandoning your debt obligations is not the solution.

Debt Series Part 2: Interest rates - unpacked

In the second part of our Debt-ucate series we explore interest rates –from how to get a better rate to what influences it, and how this affects the cost of your debt.

Debt counselling – the two sides of the coin

Being overindebted doesn’t just put a strain on your personal finances; it also puts a strain on your state of mind. The best solution is to start the process of debt counselling so that you can escape the debt cycle. But what are the ups and downs of joining this debt relief programme?

Travel ban – how to claim for the loss incurred

As with the recent Covid-19 pandemic, governments sometimes issue travel bans to prevent people from travelling to other countries. This becomes even more complicated if you’ve already planned and paid for your trip. Your flights will be cancelled, and you may lose money from cancelled accommodation arrangements. How do you claim for the financial losses incurred due to a travel ban?

Deals

Get 30% back when you fill up with your Absa card

Price: Available on request
When: Daily
Where: Nationwide

Get 50% back in eBucks when you apply for an FNB home loan

Price: Available on request
When: Daily
Where: Nationwide

Get 50% off your online fees when you pay with Capitec card

Price: Available on request
When: Daily
Where: Online